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Speaker 1: Now the latest DARTA is in for home values with

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Speaker 1: a slight increase nationally last month, breaking a ten month

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Speaker 1: streak of declining values.

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Speaker 2: Darwin, Canberra and Adelaide by.

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Speaker 1: The look of things, though, have barked the trend, recording

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Speaker 1: a decline in values for the month.

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Speaker 3: Now.

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Speaker 1: Joining us to give us a better idea of the

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Speaker 1: full picture, it is Tim Lawless, who's Core Logic's research director.

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Speaker 2: Good morning to you, Tim, Good Eddy Katie. Great to

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Speaker 2: have you on the show. Tim.

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Speaker 1: What did the March data show us for home values nationally.

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Speaker 3: Well, we did see a rise, as you mentioned, point

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Speaker 3: six percent, so that's the first lift we've seen on

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Speaker 3: a monthly basis since April last year, so just before

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Speaker 3: interest rates started to rise. So it looks like a

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Speaker 3: bit of a turning point in the market. But most

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Speaker 3: of that increase was driven by the large capitals, particularly Sydney.

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Speaker 3: Sydney was at one point four percent, which is quite

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Speaker 3: quite a significant rise on a monthly basis, with the

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Speaker 3: smaller capitals, including Darwin, still recording some downward momentum, although

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Speaker 3: it's also fair to say the smaller capitals have been

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Speaker 3: quite resilient to value falls to date, despite the fact

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Speaker 3: that rates have written so much.

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Speaker 1: So what you reckons cause the change for those major capitals.

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Speaker 2: Firstly, well, I.

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Speaker 3: Think there's a few things. Probably the biggest factor is

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Speaker 3: just supply or advertised supply is still really low. It's

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Speaker 3: about twenty five percent below average across the combined capital

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Speaker 3: It's about twenty percent below the five year average nationally,

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Speaker 3: so that this simply isn't a lot of stock to

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Speaker 3: choose from at the moment, even though buyer numbers are lower,

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Speaker 3: it looks like available stock and the walls have fallen

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Speaker 3: more dramatically. But you've also got the fact that rental

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Speaker 3: markets is extraordinarily tight. There's probably some spillover from rental

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Speaker 3: demand flowing into purchasing demand. And then kind of similar

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Speaker 3: to that, you've also got this absolute surge and overseas

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Speaker 3: migration coming through now, and that would normally flow into

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Speaker 3: rental demand. That with vacancy rates so low, I think

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Speaker 3: the pretty good argument that more overseas migrants are fast

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Speaker 3: tracking approchasing decision as well.

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Speaker 1: And so then looking at how Darwin stacks up comparatively,

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Speaker 1: I know that, like you touched on, we are obviously

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Speaker 1: a little bit different to those major capitals.

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Speaker 2: But why do you reckon that is.

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Speaker 3: Well, there's a few things about Darwin. Typically it tends

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Speaker 3: to lag the cycles for starters, but even probably beyond that,

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Speaker 3: Darwin tends to run its own race in many ways.

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Speaker 3: So we have seen Arwen housing values since rate started

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Speaker 3: rising back in May last year. The market's only down

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Speaker 3: two percent, so it's been pretty resilient so far. Compare

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Speaker 3: it to say Sydney, where the market was down a

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Speaker 3: bit more than thirteen percent before it started showing from

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Speaker 3: science and turning around. So maybe this is just a

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Speaker 3: lag and rate hikes capping up to the market. But

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Speaker 3: we also know that population growth coming into the MP

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Speaker 3: actually turned negative last year as well, so even though

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Speaker 3: we're seeing an uplift and overseas migration, interstate migration coming

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Speaker 3: into the Northern Territory did move back into negative territory,

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Speaker 3: So maybe that's weighing on demand a little bit in

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Speaker 3: the region.

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Speaker 1: And today we know that the Reserve Bank of Australia

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Speaker 1: is due to meet again to consider whether the rate rise,

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Speaker 1: whether there is going to be a rise in interest

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Speaker 1: rates for the eleventh consecutive time. Tim what kind of

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Speaker 1: impact do you think it's going to have if there

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Speaker 1: is another one, well.

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Speaker 3: Clearly higher rates of than net negative for housing markets.

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Speaker 3: It looks like there's some evidence that other factors are

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Speaker 3: outweighing or offsetting the impact of higher interest rates, like

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Speaker 3: low supply and it's improvement and demand from migration, at

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Speaker 3: least at a macro level. But I think if we

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Speaker 3: do see interest rates moving higher this month, it probably

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Speaker 3: will be the last rate hike. If not, then I

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Speaker 3: think we're pretty close to the rate hiking peak, so

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Speaker 3: it definitely would be more bad news for borrowers and

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Speaker 3: prospective borrowers. What I think we're pretty confident to call

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Speaker 3: that this will probably be either the last or second

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Speaker 3: last rate hiker of this cycle.

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Speaker 2: Oh we're all hoping, so, aren't we.

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Speaker 1: It's been It's made a lot.

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Speaker 3: Yeah, yeah. I mean if you look at mortgage rates

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Speaker 3: or mortgage or payments for a typical borrow and say

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Speaker 3: five hundred thousand dollars, they're paying nearly one thousand dollars

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Speaker 3: more a month in the debt servicing. So yeah, it's

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Speaker 3: been huge.

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Speaker 2: Now talk me through as well.

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Speaker 1: Did you take a bit of a closer look when

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Speaker 1: it comes to the rental market and how things going

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Speaker 1: for Darwin.

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Speaker 3: Well, Darwin's rental market is again bucking the trend a

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Speaker 3: little bit. We're still seeing rents rising, but nowhere near

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Speaker 3: as quickly as they were through the worst of the pandemic.

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Speaker 3: I mean, go back to say, the middle of twenty

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Speaker 3: twenty one, Darwin rents for rising at like nearly twenty

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Speaker 3: five percent per annum. That annual growth rate has now

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Speaker 3: dropped back to two point six percent, So a fairly

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Speaker 3: sharp slow down in the rate of rental appreciation, despite

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Speaker 3: the fact that vacancy rates are still quite low. So

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Speaker 3: maybe this is simply just a reflection of rental affordability

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Speaker 3: forcing rentals to fit more people into a rental reform

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Speaker 3: group household and try to spread their rental costs across

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Speaker 3: a larger pool of tenants because rent a risen so

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Speaker 3: much over the part sort of two or three years.

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Speaker 1: And Jim, what do you reason we are going to

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Speaker 1: see happen, Like, just going back on those interest rates,

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Speaker 1: what do you think we're going to see happen if

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Speaker 1: we do sort of see a steadying or a slowing

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Speaker 1: up of those interst rate rises, Well, it's.

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Speaker 3: The opposite of rates rising, of course, it's and that

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Speaker 3: positive for housing markets. We know that even just a

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Speaker 3: stabilization in interest rates would probably help to boost consumer

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Speaker 3: confidence a little bit. And we look at housing activity

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Speaker 3: and consumer sentiment is a really strong correlation, meaning when

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Speaker 3: sentiment rises, you generally tend to see more buying and

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Speaker 3: selling activity. So I think if we do see a

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Speaker 3: pause in the rate hikes and maybe a peek in

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Speaker 3: the cycle, you have to think that's going to improve

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Speaker 3: consumer sentiments and start to see a little bit more

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Speaker 3: activity coming back into the market.

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Speaker 1: Well, Tim Lawless from core Logic, the research director, or

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Speaker 1: anything else we should be aware of this morning.

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Speaker 2: No, I think so Katie got us covered. As always, Tim,

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Speaker 2: we appreciate it.

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Speaker 1: Might always love a chat and talking about what's going

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Speaker 1: on with the data when it comes to housing.

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Speaker 3: Thanks Katie, good much chat you too.

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Speaker 2: Thank you